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Longboat Key
Wednesday, Jun. 23, 2010
5 years ago

Whitney Beach Plaza under contract

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by:
Robin Hartill
Managing Editor

Business was booming when Andrew Hlywa bought Whitney Beach Plaza. It was 2002, and Hlywa and his partner, Dawn diLorenzo paid $2.5 million for the property. The shopping center was almost completely occupied with restaurants, a bar, shops and offices. With more than 35 years in business and having owned a gas station, coin laundries and dry-cleaning plants in New Jersey, Hlywa, a Longboat Key resident since 1999, thought the plaza would be a good venture.

Eight years later, Hlywa, 60, has poured $1 million of his own money into the shopping center. He spends his days working behind the counter at Longboat Key Liquors, which is located within what used to be Whitney Beach Deli & Wines. The restaurant portion of that business, which Hlywa owns, is closed. The shopping center is in foreclosure. Hlywa can’t afford the $33,000 per month mortgage on the shopping center, and more than 75% of its approximately 35,000 square feet is vacant.

“I’ll be here until they throw me out,” Hlywa jokes with customers.

The property has been on the market for at least three years. In 2009, Tina Rudek, of Engel & Völkers Longboat Key, listed the property for $7 million. She gradually dropped the price, most recently to $3.5 million, and, as the price fell, interest increased. Now, the property is under contract with a real-estate investor who has a client who wants to open a gourmet grocery store in the location. Rudek can’t name the buyer, but she says the plan would bring a “huge national brand” to the shopping center. And the client wants to keep the plaza’s current tenants. If that contract doesn’t work out, Rudek says she has a back-up buyer.

“Hopefully, we’ll have a decision by July,” she said.

The transaction is a commercial short sale, so it would absolve Hlywa of most of his debt.

Key’s first shopping center

Whitney Beach Plaza was built to serve the north end of the island, which was then more populous than the south end. Built in 1963 by Gordon Whitney, it originally consisted of a post office, a design shop and the office of Paul Neal, developer of Whitney Beach condominiums. In 1970, Neal bought the plaza for five cents per square foot and developed it over three years. He transformed it into Longboat Key’s first shopping center.

In the past four decades, it has been home to the Longboat Key Chamber of Commerce, a pharmacy, an ice-cream shop, a grocery store and various restaurants, stores and offices.

Rick Obeid, who opened Key T-Shirts in the plaza 25 years ago, said that the plaza was bustling in the 1980s and 1990s.

“Whenever someone would leave, there was someone waiting in the wings,” he said.

Sandra LaRose, who opened Design 2000, in 2000 at Whitney Beach, said that the plaza was a north-end institution then.

“There was a great camaraderie,” LaRose said. “It was a wonderful place to have a business.”

A year after Hlywa and diLorenzo bought the plaza in 2002, they also purchased Longboat Key Cocktail Lounge, aka Tiny’s of Longboat Key, and Longboat Key Liquors, both in the plaza. They began a three-year renovation of the grocery store in the plaza, transforming it into The Market.

Hlywa envisioned creating something similar to Balducci’s, a well-known gourmet grocery store in New York City. He wanted a place where customers could buy European-style wines, cheeses and food.

“It will have the type of things that you would have to travel off the island to pick up,” Hlywa told The Longboat Observer in March 2005. The Market opened in November of that year with a butcher shop, deli, sandwich selections, bakery, organic produce, espresso and gelato bar, plus the usual daily necessities.

But, about a year later, Hlywa began to realize that the business wasn’t attracting enough locals. He couldn’t afford to keep inventories high enough to compete with a major store like Publix. When Hlywa closed The Market in 2008, he described its two-and-a-half-year lifespan as “30 months of bleeding (that) had to come to an end.”

‘A tsunami of events’
In the three years that elapsed between the plaza purchase and the opening of The Market, a number of events occurred that contributed to the plaza’s decline. The Longboat Key Holiday Inn closed in 2004, taking with it between 5,000 and 8,000 visitors per month, according to Rudek. Those units were replaced largely by luxury condominiums. The decrease in tourism units translated to a decrease in foot traffic for north-Key businesses. Both 2004 and 2005 had active hurricane seasons, which affected tourism even further. Red-tide blooms also didn’t help. Some tenants say that the decline began before Hlywa and diLorenzo bought the property, with Sept. 11, and the closing of the grocery store that same year that had previously anchored the property. The sluggish economy later contributed to both the decline of the plaza and The Market.

“It’s been a tsunami of events,” Obeid said.

Then, without The Market as an anchor, traffic for remaining tenants declined. Later, in 2008, Hlywa tried to make use of the 10,000-square-foot empty space occupied by The Market by moving liquor-store operations and opening Whitney Beach Deli & Wines in the space. Because Hlywa planned to change the use of the space from mercantile to assembly occupancy, which is used to classify any space where people gather, town officials calculated the occupancy of the business at 400. With that capacity, Florida Building Code required that he install 10 additional restrooms and a voice-activated fire alarm at a cost of $150,000.

“That broke the camel’s back,” Hlywa said.

Whitney Beach Deli & Wines opened in February 2009. By Easter, business had dropped sharply. In May, the plaza lost two restaurant tenants. Hlywa, too, closed most of his restaurant operation, although reopened for a four-month period under outside management earlier this year.

What’s in store?

Although Hlywa says he regrets his decision to buy the plaza, he thinks a major chain can succeed in the location, because it, unlike him, can afford to compete with Publix. Rudek says that her client considers it an “A” location, particularly because of its position on the water.

The plaza’s tenants say that Hlywa has been a good landlord, and they will welcome a business that generates traffic.

“I’d be thrilled,” LaRose said. “The shopping center would get to stay as a part of north-end culture.”
Obeid responded to news of the possible purchase with cautious optimism.

“It could be good,” Obeid said. “But if rents go way up that could push everybody out.”

John Hutson, who opened Professional Touch Dry Cleaners in mid-December in the plaza, had a similar reaction.

“Hopefully, it will bring more people toward us,” he said. “This season has been rough.”

And as for Hlywa?

He and diLorenzo plan to move back to New Jersey to take care of his parents, although diLorenzo will keep her home on the Key. He says he has spent his life savings on the plaza. He isn’t sure what is next.

“I’m only 60, and my hands still work,” he said. “I’ll put all this past me — like a bad dream.”